GLOBAL MARKETS: As expected, the ECB decided at yesterday’s monetary policy meeting to keep its key interest rates stable and extend the APP programme by nine months to September 2018 at a reduced monthly volume of net purchases from €60bn to €30bn as of January 2018. On the back of subdued inflationary pressures, the ECB pledged for continued monetary policy accommodation, a message that was reinforced by the combination of five decisions: (i) the QE programme remained open-ended; (ii) the ECB retained its forward guidance on interest rates; (iii) the ECB committed to reinvest principal payments from maturing securities; (iv) the ECB reiterated its willingness to increase the volume of monthly net asset purchases and/or extend the duration of the programme, if needed; and (v) the ECB decided the extension of the fixed rate/full allotment procedure for MROs and 3M LTROs at least until the end of 2019. In reaction to the dovish tone of the ECB’s policy outcome, German Bunds rallied and the EUR came under pressure across the board. On the flipside, the USD firmed on news that the House passed its budget resolution for FY-2018, paving the way for tax reform legislation. Looking at today’s calendar, focus is on US Q3 GDP.

GREECE: The first round of discussions between the Greek authorities and the institutions’ (EC/ECB/ESM/IMF) heads will be completed today in a positive overall climate. So far, reportedly 20 out of the 95 prior actions have been closed while a number of other issues has been agreed and will be implemented in the coming weeks. One of the sticking points at this stage appears to be the reform in the social safety system through the change in a number of benefits which is also dependent on the findings of the spending reviews that are underway. Meetings today will revolve around fiscal matters and the reforms in the energy and product markets.

SOUTH EASTERN EUROPE

CESEE MARKETS: Emerging market assets were mixed earlier on Friday, as the positive impact from the ECB monetary policy meeting yesterday was overshadowed by the US dollar’s strength that weighed on risky assets’ high yield allure.